Based on traditional technical analysis, the market is increasingly looking more like a bull market. Daily, weekly, and monthly DeMark counts tell us to be careful over the next few weeks. A close above 1,343 would add to the bullish evidence. Failure to close above 1,343 leaves a crack in the bearish door. Using the recycled daily DeMark count of the S&P 500 as a guide, the market could push higher at least until February 9. If gains hold up today, we may take a position on the long side of the market. Based on action above or below 1,343, we can make adjustments in either a bullish or bearish direction. We have been waiting for some resolution below 1,343; we may get in the next week to ten days. Monday’s video provides additional detail on the bull and bear cases. We still prefer Germany to the U.S. on a valuation and technical basis.
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A Long-Term Look At Employment Days
By Rob Hanna | February 03, 2012 | 12:33 PM | 0 CommentsTweet This
Employment days have an interesting history and they have contributed to some worthwhile studies over the years. Below is a chart of SPY performance on Employment Days. For this equity curve I filtered to only include days where SPY was > its 200ma. Each trade was a fictional $100k.
What I find so interesting about the chart is that for a long time Employment Days in uptrends showed a strong propensity for gains. But in 2000 this edge vanished. Since then there has been no apparent advantage – bullish or bearish.
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Comments (0) | Related Topics » Traders' Talk | Technical Analysis
Some Names on My Radar
By Gary Kaltbaum | February 02, 2012 | 9:31 AM | 0 CommentsTweet This
Yesterday morning, Europe was strong and we gapped up. The news out of Europe was the same as the news we’ve been hearing for 18 months. They finally got “some sort of a deal.” I gotta tell you. I don’t think I’m even going to mention Europe anymore because I don’t know what the heck is going on over there. It seems like every time they say they’re saved—they’re not. But the market couldn’t care less. As I have told you the market has completely ignored Europe.
Even though we had a gap up today, it could have been better as the market sold off after the close. But still, it was overall a pretty darn good day.
WE GOT A FEW NAMES ON THE RADAR
Yesterday, we got stocks that broke out into the new high list…and most importantly–off of earnings reports. They must go on a watch list now. That’s what we look for at all times.
- Earnings reports beat Wall Street’s estimates handily.
- Gapped out of bases or broke out of bases and all the bases in a trading range…an elongated one where something trades between two different points.
- And then moves out with excruciatingly high volume.
That is for us to recognize. That’s all we can ask for. We got a few names today. These are on my radar screen. Keep in mind I am not advocating. I’M JUST REPORTING THE NEWS.
- Interactive Corp (IACI)
- Biogen (BIIB)
- Seagate Tech (STX)
- F5 Networks (FFIV)
If more of these show up, I’ll be glad because it shows the market has conviction.
The other part of the equation… financials were strong. Zero percent interest rates still. I mean they literally have pure profit. In fact, I saw this letter today from one Fed Head to somebody about negative yields. Seriously. Lend the United States money on a short-term basis and you pay them for the right to lend their money. You think things are screwy? You see in the real world, when you are the one doing the borrowing…over the top borrowing—you’re supposed to have to pay up on those borrowings. But because the Fed keeps interfering with the markets…well you get the point. When that ends, I have I have no idea. When the markets decide to bite back, I have no idea. I just know what’s going on.
AND….
Without trying to get too technical, something occurred on Tuesday. On the S&P 500, the 50-day moving average crossed back above the 200-day moving average. The term for that is a “Golden Cross.” That is a good occurrence. 100% a good occurrence. Just keep in mind that it happened in 2008. And then the market within a couple weeks, crapped out and cracked badly. But just remember what I have told you over the years, when things are above a 50-day moving average, bad things tend not to happen.
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S&P 500 1,343 Will Provide Insight
By Chris Ciovacco | February 02, 2012 | 9:20 AM | 0 CommentsTweet This
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The Odds That Turnaround Tuesday Lives Up To Its' Name
By Rob Hanna | February 01, 2012 | 7:28 AM | 0 CommentsTweet This
I’ve shown before that of all days Tuesday has historically shown the highest propensity to halt a short-term pullback. The study below is one from the larger Turnaround Tuesday study. All stats are updated..
As you can see the market has strongly favored a quick move higher. And when that move hasn’t happened on Tuesday it has often happened in the next few days.
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I’d be the happiest guy if...
By Gary Kaltbaum | February 01, 2012 | 6:43 AM | 0 CommentsTweet This
Tuesday was another day where the market on “now so great news” was down pretty decently. In fact the Dow, at one time, was down 107 points, but closed down only 20. We’ve have a few days like this recently where the market opens bad and finishes better. That’s good news. The not so good news is that is seems that the market is having some trouble right around this area, which not such a big deal.
It’s had a pretty decent move in January. There is a real high bullishness and we’re getting some frothiness too. It would be normal for us to just sit around or pullback for a period of time. I’d be the happiest guy if the market just sat around for a couple weeks and just traded within a few percent. It would set up the chart that much better…and let some good leadership show up.
So I repeat, I define great leadership as by finding a lot of great growth stocks busting out. There’s one now off of this Apple gap…and that’s Apple. Now hopefully, if the market stays in gear, more and more are gonna show up. Time will tell. I don’t know. But the one thing I am seeing, in spite of a lot of bullishness and no bearishness and that the market’s a little stretched and extended here. The sell-offs have lasted hours. Now we’re really had not gains in the past couple weeks. That’s not that bad.
I believe this week, we have the ADP report on Thursday. We have the Fake Unemployment report on Friday. And out of Europe…it seems the market couldn’t give a “you know what” about Europe right now. As of right now, it’s a market of steel.
6-7 pm EST
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